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Arkansas ag: $650 million hit

During the last week of October, with Arkansas set to lose many millions of dollars due to unprecedented, near season-long wet weather, Arkansas Farm Bureau analysts compiled a report on just how hard-hit the agricultural sector is.

“We did a down-and-dirty estimate before the last two days of rain,” said Gene Martin, senior market analyst, on Nov. 4. “That quoted (Arkansas Farm Bureau president) Randy Veach that up to $650 million of losses” could be incurred.

“USDA had projected a 131 million bushel soybean production for Arkansas. We looked at that and said, ‘Man, it sounds like with the damage and losses in production and everything, we could lose at least 25 percent of this year’s soybean crop.’

“Put a $9 (per bushel) figure to that. And November is trading above $10, now, so for good soybeans you’re probably looking at $9.50 to $9.75 in many locations for cash markets. That’s over $300 million (potentially lost) just to soybeans.”

As for the state’s cotton, “many cotton producers that typically make close to three bales — maybe making 1,250 to 1,400-pound yields — this year are looking at 700 to 750 pounds.”

Martin has 60 acres near Winchester in southeast Arkansas. In mid-October, he drove down from Little Rock. Martin’s acreage “was one of the few places they’d been able to harvest. It’s a high piece of sandy ground. For the last 20 years, it’s averaged 1,300 pounds per acre. There were five modules sitting on the turn-row.

“I visited with the farmer and he was hoping there were 18 bales per module. That would mean about 750 pounds to the acre. That seems to be typical of what people think they’ll harvest.”

Of course, “that doesn’t bring into account the grades. Cotton needs sunshine and … there hasn’t been much time for it to brighten up. Grades will be bad.

“So, we used a figure of 40 percent loss on cotton. At the point when we did that, only 15 percent of the cotton had been harvested. Typically, we would’ve been at 75 percent.”

Martin says it “was kind of curious” that the Winchester Gin, which normally is running wide-open the first of September, “hadn’t even opened the doors yet. There just hadn’t been any cotton picked (to justify the gin opening). So, the community is losing because a major enterprise isn’t up and running.”

Meanwhile, some 80 percent of the state’s rice has been harvested, but there have been some quality problems and yield loss. “Some of the remaining (20 percent) will probably be down and difficult to (harvest).

“There’s also a bit of corn in the field. We had a similar situation with grain sorghum earlier and there was tremendous dockage.”

Combine all those factors and it “adds up to major, major dollars lost in the farm economy. This will put individual farmers in desperate straits as far as breaking even or paying some debt down. The losses they’ll experience and the amount of money they had invested in those crops” won’t allow them to.

Asked about the SURE program — and potential 2009 disaster payments coming more than a year from now — and Martin says the set-up “is a difficult thing. You’d hate to see a situation where it’ll be 18 months, or farther, down the line before there’s some relief. Every (grower) is dealing with financial institutions with loans for the past year. I anticipate that the lending institutions know the situation but anytime there’s a delay it’ll be a problem for the producers.”

Farmers are wondering, “‘How am I going to get financed? How will I recoup losses moving into the next farm year?’ We’re not far away. We’re only in the first week of November, but farmers are already thinking about what they’ll produce next year, where, or if, they’ll get financing, all of those things. It makes for a difficult situation.”

And it could get worse. The figures cited in the Arkansas Farm Bureau report “are a beginning point and when we were doing that, we were still looking at rainy forecasts for (Oct. 28 and 29). Those were heavy, heavy rains for some areas. Southeast Arkansas received 5 to 6 inches over that 24- to 48-hour period. That added insult to injury.

“It’s an ongoing thing. If we can have two weeks of (good) weather, it’ll make a huge dent in the harvest. But we have a forecast for (the week of Nov. 9) of another system moving through. Rain chances aren’t huge, right now, but that can change.”

Some areas remain flooded and “it’s difficult for farmers to get in. I think we’ll see farmers with problems in preparing land (for the next crop). There are huge ruts in some areas. The farmers can’t wait for the ground to solidify and they’re rutting and cutting it up. There will be (extra) costs incurred in getting the fields ready for the next crop.”

Much of the Mid-South is in similar straits. “There are similar problems in the upper Mississippi Delta and northern Louisiana — although their crops were a little earlier and harvest was further along than Arkansas.’ There are concerns in the Missouri Bootheel with cotton and other crops.”

An Arkansas Farm Bureau staff member recently took a trip to South Dakota. “He saw much the same there, in Iowa and northwest Missouri — everything at a standstill and major parts of crops are yet to be harvested.

“I visited with a staff member from the Georgia Farm Bureau yesterday. They went from having a major drought to flooding in Atlanta and concerns about getting peanut and cotton harvests. There are quality issues.”

Arkansas is “not alone in the boat. We may be a little worse off than other areas simply because we’re further behind in cotton harvest and there are rice issues that other states may not have.

“This is a major problem for our farmers. Our city cousins and everyone else need to be aware of it. … The farming economy has taken a hit and … it will ripple through communities and across the state.”